Contract Administration

Contract Administration is the term used to cover the work involved when a Chartered Surveyor or Chartered Engineer plans, specifies, tenders and then administers the contract for a large building works project. Typical projects might include

external repairs & redecorations

internal common parts redecorations

upgrading or replacing communal services

The context of what works are required and what will be recoverable as a service charge expense can be important considerations:
regard needs to be given to

the frequency that external and internal decorations are required by the lease or transfer document,

the condition of the building, when works were last carried out, and

how long it is envisaged is likely to elapse before future external decorations are all considerations.

What a lease or transfer document will require can vary vastly from a requirement to affect external decorations every 5 years and internal decorations every 7 years to a non specific clause which might say “as deemed necessary by a Surveyor”.

In contemplating external decorations the construction of the lease will determine whose responsibility certain items are. A well drafted legal document would give the Freeholder or Management Company ownership and responsibility for repairing timber window members as well as painting the timbers to protect them from weathering. Such a clause would prevent legal disputes between a Freeholder and Lessee is say a timber window becomes rotten due to lack of decoration.

It is essential to clarify the position before works start, else for example a project could start on site and delays occur if residents suddenly wish to get quotes to paint their own windows. Delays cost money due to increased scaffolding hire charges and possibly a claim from a contractor for damages.

Step 1

Ensure that those paying for the works understand that:

it is the lease that sets out a duty & frequency to carry out cyclical works;

that there are Health & Safety, defects diagnosis, specification and contract matters which typically a Surveyor/Engineer takes care of;

there are up to 3 stages of statutory consultation that must be served, before works can begin, else recoverability of the cost of the works may be restricted to £250 per owner;

the Health & Safety Executive will probably have to be notified of the project;

that the lease sets out how and when funds can be collected towards a project, i.e. you may have to wait until the next year and include the amount required in your service charge budget.

1. What to do first

2. Key requirments

What a lease or transfer document will require can vary vastly from a requirement to affect external decorations every 5 years and internal decorations every 7 years to a non specific clause which might say "as deemed necessary by a Surveyor". Look for the relevant Clause in the Freeholder’s or Management Company’s covenants
Ringley in-house solicitors Ringley law can deal with the consultation requirements, which since the introduction of the Commonhold & Leasehold Reform Act 2002 can require up to 3 stages of consultation.

Step 2

Consider what legal requirments apply:

Planning permission

Building regulations

Listed buildings consent

Section 20 consultation

Project notification to the HSE (Health & Safety Executive)

Appointment of a Planning Supervisor

Preparation of a Health & Safety file

Preparation of a pre-tender Health & Safety plan

Preparation of a Survey to confirm the presence of asbestos

Safe access to carry out the works as per the 1996 Health & Safety Regulations

Ringley can act as CDM Co-ordinator/Supervisor and deal with notification to the Health & Safety Executive, reparation of the pre-tender health and safety plan and compilation of the health and safety file.

Issue a final practical completion certificate. This is the end of works on site but incorporates a defects liability period.

Issue a final certificate (releasing any retained money at the end of the defects liability period).

What to understand what should happen when?

From specialist identification of works, materials and quantities to being on site – see the flowchart below for more information on planning big repairs and major works.

Tips

The Surveyor/Engineer’s work needs to tie in with the statutory consultation.

It is rarely possible to get a job specified and on site in less than 4-5 months.

Often if you specify and tender a job in the winter you will get a better price.

You may have to wait until your next budget before legally you can collect the funds.

Ringley's charges range from 8%-15% of the contract sum, depending on the size of the contract and complexity.

Step 4

Consider for works carried out under a lease whether the lease enables recoverability:

Are the proposed works likely to be classed as an improvement?
Regard must also be given to the condition of the building as built and whether proposed works could be deemed an improvement. Traditionally leases did not pass on a service charge liability to leaseholders for improvements, but leases drafted in the last 15 or so years often now provide for improvements to be carried out at the service charge expense if a democratic decision of a management company is made.
For example in the case of Mr Dolan, Elm Park Road Residents Company Limited vs (SC402373) the County Court deemed that as the lease did not specifically provide for improvements to be an allowable service charge expense the costs of installing a communal satellite system could not be reasonably recoverable from the lessee.

Getting Started

Care needs to be taken in contemplating major works or large refurbishment expenditure as for example without fulfilling the statutory consultation requirements of the Landlord & Tenant Acts which may include serving up-to three stages of consultation on persons responsible for paying service charges the maximum recoverable contribution from owners could be limited to £250!
Also, you need to be sure that you are not at risk of being prosecuted by the Health & Safety Executive if you fail to notify a relevant project and the Construction Design & Management Regulations 1994 apply to the project. This may result in needing to consider appointing a CDM Co-ordinator.
Finally, with health & safety legislation and regulation seemingly increasing by the day the person in charge needs to be aware of the update to the Health & Safety Regulations Effective 1996 which limits what is considered safe access for working to any area above 2nd floor level or even 1st floor level in older buildings where the floor to ceiling height is above the modern standard of 2.3 - 2.4 metres. Else the risk is prosecution by the Health & Safety Executive.

We hope that this gets you started on understanding all the factors involved in contemplating a works project, should you require further assistance please

Testimonial

Customer Comments

One of our buildings suffered with stiflingly warm common parts due to a lack of ventilation. The initial solution put forward was very costly so one of the surveyors in our building engineering team thought outside of the box and came up with a much more cost effective solution which has solved the problem.
Ms T - Millharbour